IDENTIFICACIÓN DE LOS IMPACTOS AMBIENTALES

This last chapter of the report describes the conclusion and recommendations of this research. The goal of the research is to provide the management with improvements on the current warehouse processes to decrease variation in workload and improve process efficiency. In Section 8.1, we give the conclusion of the research. In Section 8.2, we give recommendations to the company. Finally, in Section 8.3, we give the limitations of the research.

8.1 Conclusion

The main question of this research is:

“What is the current performance of the logistic processes of the VMI Holland warehouse, and how can we control and improve the efficiency and effectiveness of the internal processes, while maintaining or improving the quality of outbound?”

To answer the main question, we have formulated several sub questions. We present per sub question the key findings.

 What are the characteristics and parameters of the processes of the VMI Holland warehouse?

This question is answered in Chapter 2. We described the current activities and material flows of the VMI Holland warehouse. We identified two material flows: from suppliers and from the anonymous warehouse. The warehouse of VMI Holland consists of several stages: the receive stage, the accept stage, the put away stage, the pick stage, and the transport stage. The accept stage is divided into a workstation for small/medium items and a workstation for large/heavy items. Each storage zone has its own put away process: red box zone, euro pallet zone, and a zone for steal pallets and self-carrying items. The transport stage consists of a workstation for final control and a workstation for transportation. We have identified, with the help of data and measurements, the average processing time of the workstations. For the inbound processes, it is hard to foresee the workload due to the variability in arrival times and the discrepancy of expected and actual received items. The workload of the outbound process can be predicted accurately. It is of great importance that items are placed on time into their storage locations to prevent delays in the outbound process and at the manufacturing department. We conclude that the company is limited in controlling its processes due to a lack of performance measurements.

 What are the performance indicators of general warehouse processes?

This question is answered in Chapter 3. First, we studied the definition of the warehouse function with theory from literature. We identified three important functions of warehouses: (i) to bridge the interval of time between the moment that items are received and the moment that they are needed, (ii) to change the composition of the goods, and (iii) to guide items to their destinations. With a literature study, we clarified the importance of performance measurement and gave characteristics of proper performance indicators. We created a list of indicators that is commonly used in a warehouse environment. The list includes direct and indirect indicators that describe the utilization, productivity, and effectiveness of processes. The list can be found in Appendix C.

 What performance indicators fit the needs of the stakeholders of the VMI Holland warehouse?

This question is answered in Chapter 4. To select relevant indicators, we identified the main stakeholders of the warehouse activities. Two important stakeholders are the head of material management that wants to control the processes at the strategic and tactical level, and the foremen that want to control the processes at the tactical and operational level. We selected 14 indicators and put them in a framework: The performance wareHouse of VMI Holland. This framework gives a clear

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overview of the performance of the warehouse and allows direct adjustments on the performance. We selected the following performance indicators:

 Storage utilization;  Put away time;

 Queueing time of processes;  Order lead time;

 Queueing length of processes;  Storage accuracy;

 Workforce flexibility;  Order picking time;

 Throughput;  Shipping time;

 Dock to stock time;  Shipping accuracy;

 Receiving time;  On-time delivery.

For each of these indicators, we gave a description, the measurement method, the formula, the norm, a description of how to measure, how often, and how to react on the performance.

 How can we analyse the inbound process of the VMI Holland warehouse?

This question is answered in Chapter 5. In order to find potential improvements for the inbound process of the system, we analysed the system with a simulation model. We translated the actual system into a conceptual model that includes the objectives, inputs, outputs, the model content, assumptions, and simplifications of the model. To model variability, we determined the theoretical distribution functions of workstations, properties of material types, arrival times, and the workforce. We built, validated, and verified the model in Siemens Plant Simulation. In order to create representative outcomes, each simulation will run for 83 days and consist of 13 replications. The outcome of the simulation provides information on the: dock to stock time of items, average waiting times of processes, and the occupation rates of the workstations.

 What are the scenarios and interventions for the simulation model of VMI Holland?

This question is answered in Chapter 6. We defined two scenarios, each having several interventions. For each scenario and intervention, we described the adjustments on the simulation model. Scenario I represents the current situation of the inbound process of the VMI Holland warehouse. To find potential improvements on the current system, we defined three interventions. The first intervention describes the current system with a flexible workforce, where employees are able to work on workstations within their warehouse stage. This intervention enables us to analyse the effects of a flexible workforce on the variability of workload. The second intervention describes the current system with an inbound flow that arrives at the start of the day. This intervention eliminates the variability of arrival times at the warehouse.

Scenario II represents a future situation of the inbound process of the VMI Holland warehouse. We defined a scenario where all capacities of the workstations are set to their maximum and where the inbound material flow will increase with a factor 2, as desired by the head of material management. To find potential improvements on the system, we defined two interventions. The first intervention consists of a stepwise approach to find potential improvements by increasing the maximum capacities of workstations. At each iteration, the maximum capacity of the bottleneck workstation will be increased till 99% of the items are placed within 8 working hours into their storage locations. The second intervention eliminates the material flow of the anonymous warehouse, as desired by the head of material management. The third intervention describes the current system with an inbound flow that arrives at the start of the day. This intervention eliminates the variability of arrival times at the warehouse.

 How can VMI Holland improve their warehouse processes based on the results of experiments with various interventions and scenarios?

This question is answered in Chapter 7. The outcomes of the simulation model are confidential. We do give some main findings.

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Conclusions from (current) scenario I

In order to deal with the variability in workload and to increase the performance of the system, we recommend the company to use a flexible workforce.

When all items arrive at the start of the day, there is a need for a large buffer to store all the items before they are received. If the items were delivered in a perfect time window, meaning there is no waiting time in front of the receive station, the performance of the system increases.

Conclusions from (future) scenario II

After 5 iterations, the simulation model meets the desired performance. Over 99% of the items are placed within 8 working into their storage locations. If we summarize the iterations, the company should invest in the following resources:

 Increase the maximum capacity of the accept workstation for RB/EP items, from 11 to 13 employees;

 Increase the maximum capacity of the put away workstation for RB items, from 4 to 6 employees;

 Increase the maximum capacity of the put away workstation for EP items, from 3 to 4 employees.

When we eliminate the anonymous items from the inbound, the average dock to stock time decreases. It would increase the performance of the system, but there will be a need to invest in the maximum capacity of the accept station for RB/EP items.

When all items arrive at the start of the day, there is again a need for a large buffer to store all the items before they are received. If the items were delivered in a perfect time window, meaning there is no waiting time in front of the receive station, we could say that the performance of the system has slightly increased.

“What is the current performance of the logistic processes of the VMI Holland warehouse, and how can we control and improve the efficiency and effectiveness of the internal processes, while maintaining or improving the quality of outbound?”

VMI Holland is limited in measuring and controlling the performance of the warehouse processes. Therefore, we proposed a framework of performance indicators that enables the company to control its processes and make decisions at the strategic, tactical, and operational level. For each indicator we gave a comprehensive description that the foremen and head of material management can use to control their processes. The current system can be improved by implementing a flexible workforce consisting of employees that can work at several workstations at the time. Variation in workload can be reduced and backlog be prevented. In the future situation, the company should invest in the capacities of the accept workstation for RB/EP items and in the capacities of both the put away workstations for RB and EP items.

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8.2 Recommendations

In this section, we give the recommendations of the research. In Section 8.2.1, we give a roadmap including recommendations to performance improvement. In Section 8.2.2, we give additional recommendations.

8.2.1 Roadmap to process improvement

From the results of the previous chapter, we identified the need for a flexible workforce and to increase capacities to control the variability in workload. In this section, we draft a roadmap that describes the steps the company should follow to successfully implement a flexible workforce and performance measurements to ensure the warehouse can manage its processes:

 Step 1: gain insight in performance of processes. To gain insight into the performance of the processes, we recommend VMI Holland to implement the Performance wareHouse of VMI Holland, as described in Section 4.2. This framework gives the company a clear overview and accurate insight in the performance of the warehouse activities. It enables the head of material management to make decisions at the strategic and tactical level and the foremen to adjust capacities at the operational level. The framework provides the foremen with the workload at processes and gives the waiting times. It prevents the processes from backlogs that can lead to a high dock to stock time. To measure all the indicators, adjustments on the current system has to be made:

i. Assign a unique identification number to items that arrive at the warehouse and keep track of which employee works on what workstation, using what scan device;

ii. Develop queries in the ERP that transforms data into working performance indicators that can be updated frequently;

 Step 2: design a flexible workforce. To control the variability in workload and to increase the efficiency of processes, we recommend VMI Holland to implement a flexible workforce, where employees can work at multiple workstations. We can subdivide this step into smaller milestones:

i. Identification of the recommended competences of each workstation; ii. Document the competences of employees;

iii. Train employees if necessary.

With this information, the foreman is aware of what person can work at which workstation making it easy to plan and shift employees. For each day, the foremen will need to compose a workforce with employees that have the right competences.

 Step 3: increase capacities. A temporarily increase of workforce at a certain workstations can only be achieved when the capacity of this workstation allows the increase. From the results of the simulation model of scenario II we have seen that when the material inbound flow increases, there is a need to expand the maximum capacities of workstations.

i. Increase the maximum capacity of the put away workstation for RB items from 11 to 13 employees. ;

ii. Increase the maximum capacity of the put away station for EP items from 4 to 6 employees;

iii. Increase the maximum capacity of the accept workstation for RB/EP items from 3 to 5 employees;

iv. Modify/simplify workstations in such way that employees can directly start working without set up times.

 Step 4: start managing the warehouse processes. With the framework of performance indicators and the ability to shift employees along workstations, the foremen are now able to react on variability in workload at the operational and tactical level. The head of material management is able to decision making at the tactical and strategic level.

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The steps of the roadmap are shown in Table 8.1, along with the person/department responsible and the expected duration. All steps of the roadmap can be performed simultaneous, whereby the implementation can be realised within 10 weeks.

Table 8.1: Roadmap to process improvement.

Steps Responsible weeks

Step 1: Implement performance framework 10

1.1 Perform system adjustments for data collection IT department 6

1.2 Construct queries to measure indicators IT department 4

Step 2: Design a flexible workforce 8

2.1 Define recommended competences of workstations Foremen 2

2.2 Documentation of employees competences Foremen/Randstad 2

2.3 Train employees Foremen 4

Step 3: Increase capacities 7

3.1 Increase capacity put away station RB items Supply innovator 5

3.2 Increase capacity put away station EP items Supply innovator 5

3.3 Increase capacity accept workstation RB/EP items Supply innovator 5

3.4 Modify/simplify workstations to prevent setup times Foremen 2

Step 4: Monitor the performance of the processes Foremen / head of material management

continuously

Increasing the capacity of the put away workstation for RB items

During the research, we have seen that the maximum capacity of the put away station for RB items can be increased by preselecting items by the aisle they belong to. In this case, an additional employee sorts all items in the buffer in front of the put away station. Each employee that put away items into storage locations will be responsible for a subpart of the storage zone. An experiment in the actual system has proved this method.

Increasing the capacity of the put away workstation for EP items

We have seen that 29% of the processing time of the put away station for EP items consists of non- value adding proceedings (putting away empty euro pallets). We have also calculations showing that the efficiency of the put away stations will increase when the total number of items to put away at the time increases. A further research in this workstation might improve the efficiency of this workstation.

Increasing the capacity of the accept workstation for RB/EP items

The maximum capacity of the accept workstation for RB/EP items can easily increase by adding a new lane next to the existing lanes.

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8.2.2 Additional recommendations

 We recommend VMI Holland to make use of the ‘supportive’ employees of the warehouse to temporarily increase the workforce and so the capacities of workstations;

 We recommend VMI Holland to improve the culture among employees within the warehouse. Currently, the warehouse functions as two separate islands;

 We recommend VMI Holland to prevent overtime of the receive station, by making arrangements with suppliers to deliver items in a tight time window, not and certainly not close to the afternoon;

 We recommend VMI Holland to develop workstations and equipment in such way that employees can immediately start working without losing time to start-up;

 We recommend VMI Holland to maintain or even improve the quality of the outbound, by letting employees work more often at other stages of the warehouse. We recommend to prepare (new) employees warehouse-wide, instead of a focus on a single stage;

 We recommend VMI Holland to reduce the amount of items that have to be processed from the anonymous warehouse. An analysis with the supply innovation department has proven that the workload of the put away station can be decreased by bundling items from the anonymous warehouse with the same production order (and so the same storage location). In this case, the workload from the anonymous workload can decrease with XX%.

8.3 Limitations

The research has several limitations that we discuss in this section.

 Data that is used for the inbound of items, is restricted to a particular period in time. The production of new innovative machines influences path items passes through the warehouse workstations;

 Due to a lack of information, approximation distribution functions have been used to determine the processing times of workstations. Although, these approximation distribution functions are obtained in the right way, they might differ from reality.

8.4 Further research

 Further research on the characteristics of processes and product types might improve the outcomes of the simulation, but asks for accurate performance measurement;

 Investigate the further possibilities for working with a flexible workforce to find the ‘perfect’ mix of employees that fit the desired competences of the workstations;

 A study to plan the arrival of items by suppliers in perfect time windows helps the company to prevent work in overtime at the receive station.

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